High dividend yields for Russian oil and gas majors

By Ben Aris in MoscowNovember 18, 2015

Gazprombank issued a note with its estimates of the dividend yields for Russia's leading oil and gas companies in 2015 this week. The good news is that many of the companies are paying yields, with the best, SurgutNG, paying more than 10%.

Although not all Russian companies have issued third quarter reports yet, the quarter is now over and the trend is pretty much clear, Gazprombank argues.

"We expect the leaders to remain pretty much the same compared to last year – the preferred shares of SurgutNG, Tatneft and Bashneft, and shares of Gazprom Neft. We note that most Russian oil companies offer dividend yields this year of more than 5%, solidifying their reputation as decent payers," analyst Alexander Nazarov wrote in a note.

Gazprom, the most liquid Russian oil and gas stock, may be among the top five O&G companies in terms of dividend yield, which could provide support to the name, Nazarov added.

"Among possible positive surprises, we highlight Lukoil, which we estimate should increase dividends this year by 15% y/y. The company has historically guided annual dividend growth and increased its interim dividends by 9% y/y," he concluded.

Opposition leader, former prime minister and head of the Batkivshchyna (Fatherland) party Yulia Tymoshenko leads in the polls ahead of the 2019 presidential elections.

Russia’s drive to make China its most important trade partner in terms of dollar turnover is on track as trade between the two new found friends increases steadily. The partners have also launched a yuan-ruble settlement system.

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